Roulette B Proximity A next generation connection Proximity Research Report
Online Video Streaming: A Changing Landscape As the Online Video Streaming Landscape Changes, So Does the Advertisement Opportunities By Bryan Roulette
Spring 2010
Table of Contents Executive Summary 1
Introduction: Online Video Streaming 2
Gen-Y Watching Less TV 3
What this means 4
Hulu: An Advertising Goldmine 5
Media Spending Projections 6
Social Media Sites vs. Online Video Sites 7
Recommendations 8
References 9
Executive Summary
As the online video streaming competitive landscape changes so does the advertisement opportunities available for companies trying to target the Gen-Y demographic. Here at Proximity we explore a number of options to discover these changing market behaviors. With the increase in video sites such as YouTube and Hulu, the number of ways to reach a specific group or audience is on the rise. But how do companies take advantage of these changes? This is where Proximity comes in. Our team of video analysts have conducted a number of focus groups that show the best advertising strategies for both Gen-Y males and females. With this information, companies looking to reach Gen-Y females should show the majority of their advertisements on prime time cable. Also, in order to reach males companies need to use online video sites such as YouTube and Hulu.
Introduction: Online Video Streaming Creates Alternative Ad Space The growth of recording television with DVR programs has caused a huge decline in the amount of advertisement space available in traditional ways. Nowadays people usually record the television shows they watch and fastfoward through the commercials. Also tv and video demand services usually offer limited amounts of commercials to attract customers. These trends lead to a declining television advertisement industry and create problems for those companies searching for ways to make themselves known. However with the decline of one type of advertisement opportunity came the rise of another. The amount of online video sites such as YouTube and Hulu has risen significantly. Here at Proximity we have conducted a number focus group sessions that suggested specific ways to reach both Gen-Y males and females. Below is a table that shows the growth of online video advertising spending for the last 3 years as well as the projected growth for the next 3 years.
Table 1. Online Video Advertisement Growth Source: Adotas (http://www.adotas.com/2009/08) Gen-Y Watching Less Television Advertisements As stated earlier, here at Proximity we have noticed a huge decline in the amount of television advertisements watched by the Gen-Y demographic. Our focus group sessions were aimed specifically at realizing these changing trends. The results showed: · Gen-Y takes various actions to avoid watching commercials and advertisements. · Gen-Y uses many different sources to watch broadcast television especially online streaming sites. · Primetime tv shows are mostly watched by females however these shows are usually recorded. · Most Gen-Y males use online streaming sites a lot and this number is increasing. · Only advertisements viewed largely by the male Gen-Y population are those which are broadcasted during sporting events. Source: Wikispace. (http://engl317s10.wikispaces.com)
What This Means For Your Advertisements According to focus group results, Gen-Y prefers online video-streaming sites like Hulu and YouTube. These findings also show that primetime television ad space is really only valuable for targeting the Gen-Y female population. It also might be smart to invest more in online television sites who offer advertising opportunities since there is an increasing amount of people who are watching their broadcast television online. This also can be beneficial since many of these sites don’t allow users to fast-forward through commercials and advertisements, making sure your investment in advertising won’t be wasted. Our results also showed the increasing amount of Gen-Y members who are using Hulu which we believe to be a goldmine of valuable ad space.
Hulu: An Advertising Goldmine The emergence of Hulu, the new a leading online video site has significantly changed the competitive landscape of online advertising. A market which used to be totally owned by YouTube has now expanded to include many new video sites with Hulu as it’s frontrunner. Experts believe that the increase in Hulu users, especially out of the Gen-Y demographic is due to its user friendly interface. Although YouTube is still way out in front of Hulu, with it’s 5 billion streams a month, we here at Proximity believe Hulu is the better advertising choice for targeting Gen-Y. These beliefs are backed by our huge collection of focus group studies and results. Source: Web TV Wire. (http://www.webtvwire.com/hulu-continues-to-shine-profiles-galore-impressive-stats-all-via-word-of-mouth/)
While Total Media Spending Is Expected to Decline, Online Ad Spending Is Projected to Grow These projections of the future of the advertising market show us how many companies are abandoning traditional media advertising while they are adopting online advertising methods. A study conducted by the website SceneClips.com shows that: · Total media spending including television, radio, and print will decline 14.5% in 2010. · Online video ad spending amounted to $324 million in 2007and rose to over $1 billion in 2009 and is expected to continue rising. · By 2013 online video advertising will represent 5.5% of TV ad spending ~ 244% growth over 5 years. · eMarketer estimates that online video ad spending will continue grow at over 40% for the next 3 years.
This expected growth in spending shows how experts realize the increasing value in online video advertisements especially when targeting the Gen-Y demographic.
Social Media Sites vs. Online Video Sites While some companies believe social media sites such as Twitter and MySpace present better advertising opportunities than online video sites, Proximity and it’s analysts urge our clients to ignore these trends. Below is a table that shows our reasoning: Table 2. US Marketers Plan to Focus Their Online Budget. Source: Training Marketer. (http://trainingtime.wordpress.com/2009/01/12/2009-marketing-trends-online-video/)
This table shows the trend of more and more companies focusing their marketing budgets on online video advertisements. Social media sites are a good source of advertising but they are not as efficient as online video sites are. They also present targeting issues since there is such a enormous variety of people who use sites such as Facebook. Using video sites such as Hulu and YouTube allows our clients to better target specific groups of people by putting advertisements before certain programs popular with certain demographics. For example a company wanting to aim their advertisements at Gen-Y males may want to have their ads shown on video sites before programs such as “The Office” or other shows with large numbers of young male followers.
Recommendations We here at Proximity believe the following recommendations will help make your advertising efforts more effective: · If targeting Gen-Y females include advertisements on television shows that are usually shown on primetime, especially popular competition shows such as “American Idol”, “So You Think You Can Dance”, and “Dancing With the Stars.” While online streaming sites prove to be very efficient advertising mediums for Gen-Y males, they aren’t so effective in targeting females. · When targeting Gen-Y males, advertisements should be shown on popular streaming sites, mainly Hulu and YouTube. · Also if targeting Gen-Y males include advertisements during sporting events because our focus group sessions showed these are the most commonly watched programs among them. · With the increasing amount of DVR users, television commercials are rarely watched since people can fast-forward through them. However on some online video sites users cannot fast-forward through them so your advertisements reach your target audience better.
References
Adotas. Adotas, Internet Advertising and Media News. N.p., n.d. Web. Retrieved May 18, 2010. http://www.adotas.com/2009.
SceneClips. "The Film Investors Network Helping Artists Find Film Investors." The Film Investors Network Helping Artists Find Film Investors. N.p., n.d. Web. Retrieved May 18, 2010. <http://www.sceneclips.com>.
Roulette B
Proximity
A next generation connection
Proximity Research Report
Online Video Streaming: A Changing Landscape
As the Online Video Streaming Landscape Changes, So Does the Advertisement Opportunities
By Bryan Roulette
Spring 2010
Table of Contents
Executive Summary 1
Introduction: Online Video Streaming 2
Gen-Y Watching Less TV 3
What this means 4
Hulu: An Advertising Goldmine 5
Media Spending Projections 6
Social Media Sites vs. Online Video Sites 7
Recommendations 8
References 9
Executive Summary
As the online video streaming competitive landscape changes so does the advertisement opportunities available for companies trying to target the Gen-Y demographic. Here at Proximity we explore a number of options to discover these changing market behaviors. With the increase in video sites such as YouTube and Hulu, the number of ways to reach a specific group or audience is on the rise. But how do companies take advantage of these changes? This is where Proximity comes in. Our team of video analysts have conducted a number of focus groups that show the best advertising strategies for both Gen-Y males and females. With this information, companies looking to reach Gen-Y females should show the majority of their advertisements on prime time cable. Also, in order to reach males companies need to use online video sites such as YouTube and Hulu.
Introduction: Online Video Streaming Creates Alternative Ad Space
The growth of recording television with DVR programs has caused a huge decline in the amount of advertisement space available in traditional ways. Nowadays people usually record the television shows they watch and fastfoward through the commercials. Also tv and video demand services usually offer limited amounts of commercials to attract customers. These trends lead to a declining television advertisement industry and create problems for those companies searching for ways to make themselves known. However with the decline of one type of advertisement opportunity came the rise of another. The amount of online video sites such as YouTube and Hulu has risen significantly. Here at Proximity we have conducted a number focus group sessions that suggested specific ways to reach both Gen-Y males and females. Below is a table that shows the growth of online video advertising spending for the last 3 years as well as the projected growth for the next 3 years.
Table 1. Online Video Advertisement Growth
Source: Adotas (http://www.adotas.com/2009/08)
Gen-Y Watching Less Television Advertisements
As stated earlier, here at Proximity we have noticed a huge decline in the amount of television advertisements watched by the Gen-Y demographic. Our focus group sessions were aimed specifically at realizing these changing trends. The results showed:
· Gen-Y takes various actions to avoid watching commercials and advertisements.
· Gen-Y uses many different sources to watch broadcast television especially online streaming sites.
· Primetime tv shows are mostly watched by females however these shows are usually recorded.
· Most Gen-Y males use online streaming sites a lot and this number is increasing.
· Only advertisements viewed largely by the male Gen-Y population are those which are broadcasted during sporting events.
Source: Wikispace. (http://engl317s10.wikispaces.com)
What This Means For Your Advertisements
According to focus group results, Gen-Y prefers online video-streaming sites like Hulu and YouTube. These findings also show that primetime television ad space is really only valuable for targeting the Gen-Y female population. It also might be smart to invest more in online television sites who offer advertising opportunities since there is an increasing amount of people who are watching their broadcast television online. This also can be beneficial since many of these sites don’t allow users to fast-forward through commercials and advertisements, making sure your investment in advertising won’t be wasted. Our results also showed the increasing amount of Gen-Y members who are using Hulu which we believe to be a goldmine of valuable ad space.
Hulu: An Advertising Goldmine
The emergence of Hulu, the new a leading online video site has significantly changed the competitive landscape of online advertising. A market which used to be totally owned by YouTube has now expanded to include many new video sites with Hulu as it’s frontrunner. Experts believe that the increase in Hulu users, especially out of the Gen-Y demographic is due to its user friendly interface. Although YouTube is still way out in front of Hulu, with it’s 5 billion streams a month, we here at Proximity believe Hulu is the better advertising choice for targeting Gen-Y. These beliefs are backed by our huge collection of focus group studies and results.
Source: Web TV Wire. (http://www.webtvwire.com/hulu-continues-to-shine-profiles-galore-impressive-stats-all-via-word-of-mouth/)
While Total Media Spending Is Expected to Decline, Online Ad Spending Is Projected to Grow
These projections of the future of the advertising market show us how many companies are abandoning traditional media advertising while they are adopting online advertising methods. A study conducted by the website SceneClips.com shows that:
· Total media spending including television, radio, and print will decline 14.5% in 2010.
· Online video ad spending amounted to $324 million in 2007and rose to over $1 billion in 2009 and is expected to continue rising.
· By 2013 online video advertising will represent 5.5% of TV ad spending ~ 244% growth over 5 years.
· eMarketer estimates that online video ad spending will continue grow at over 40% for the next 3 years.
This expected growth in spending shows how experts realize the increasing value in online video advertisements especially when targeting the Gen-Y demographic.
Source: SceneClips. (www.sceneclips.com/new-media)
Social Media Sites vs. Online Video Sites
While some companies believe social media sites such as Twitter and MySpace present better advertising opportunities than online video sites, Proximity and it’s analysts urge our clients to ignore these trends. Below is a table that shows our reasoning:
Table 2. US Marketers Plan to Focus Their Online Budget.
Source: Training Marketer. (http://trainingtime.wordpress.com/2009/01/12/2009-marketing-trends-online-video/)
This table shows the trend of more and more companies focusing their marketing budgets on online video advertisements. Social media sites are a good source of advertising but they are not as efficient as online video sites are. They also present targeting issues since there is such a enormous variety of people who use sites such as Facebook. Using video sites such as Hulu and YouTube allows our clients to better target specific groups of people by putting advertisements before certain programs popular with certain demographics. For example a company wanting to aim their advertisements at Gen-Y males may want to have their ads shown on video sites before programs such as “The Office” or other shows with large numbers of young male followers.
Recommendations
We here at Proximity believe the following recommendations will help make your advertising efforts more effective:
· If targeting Gen-Y females include advertisements on television shows that are usually shown on primetime, especially popular competition shows such as “American Idol”, “So You Think You Can Dance”, and “Dancing With the Stars.” While online streaming sites prove to be very efficient advertising mediums for Gen-Y males, they aren’t so effective in targeting females.
· When targeting Gen-Y males, advertisements should be shown on popular streaming sites, mainly Hulu and YouTube.
· Also if targeting Gen-Y males include advertisements during sporting events because our focus group sessions showed these are the most commonly watched programs among them.
· With the increasing amount of DVR users, television commercials are rarely watched since people can fast-forward through them. However on some online video sites users cannot fast-forward through them so your advertisements reach your target audience better.
References
Adotas. Adotas, Internet Advertising and Media News. N.p., n.d. Web. Retrieved May 18, 2010. http://www.adotas.com/2009.
SceneClips. "The Film Investors Network Helping Artists Find Film Investors." The Film Investors Network Helping Artists Find Film Investors. N.p., n.d. Web. Retrieved May 18, 2010. <http://www.sceneclips.com>.
Training Marketer. "2009 marketing trends: Online video « Training Marketer."N.p., n.d. Web. Retrieved May 18, 2010. <http://trainingtime.wordpress.com/2009/01/12/2009-marketing-trends-online-video/>.
Web TV Wire | Internet Video Business & Gadgets." Hulu Continues To Shine | Profiles Galore & Impressive Stats… All Via Word Of Mouth." N.p., n.d. Web. Retrieved May 18, 2010. <http://www.webtvwire.com/hulu-continues-to-shine-profiles-galore-impressive-stats-all-via-word-of-mouth/>.
WikiSpace. N.p., n.d. Web. Retrieved May 18, 2010. <engl317s10.wikispaces.com>.